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DaVita Inc (NYSE:DVA)
Beneish M-Score
-2.70 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

DaVita Inc has a M-score of -2.70 suggests that the company is not a manipulator.

DVA' s Beneish M-Score Range Over the Past 10 Years
Min: -3.51   Max: -0.76
Current: -2.7

-3.51
-0.76

During the past 13 years, the highest Beneish M-Score of DaVita Inc was -0.76. The lowest was -3.51. And the median was -2.58.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of DaVita Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.0148+0.528 * 1.0212+0.404 * 1.0057+0.892 * 1.0727+0.115 * 1.0405
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0587+4.679 * -0.0642-0.327 * 1.0087
=-2.70

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $1,850 Mil.
Revenue was 3730.576 + 3717.651 + 3581.136 + 3533.589 = $14,563 Mil.
Gross Profit was 1032.947 + 1046.626 + 998.803 + 1018.458 = $4,097 Mil.
Total Current Assets was $4,261 Mil.
Total Assets was $18,926 Mil.
Property, Plant and Equipment(Net PPE) was $3,045 Mil.
Depreciation, Depletion and Amortization(DDA) was $695 Mil.
Selling, General & Admin. Expense(SGA) was $1,589 Mil.
Total Current Liabilities was $2,639 Mil.
Long-Term Debt was $8,972 Mil.
Net Income was 571.332 + 53.382 + 97.434 + -6 = $716 Mil.
Non Operating Income was 1.876 + 3.215 + 2.976 + 4.631 = $13 Mil.
Cash Flow from Operations was 535.623 + 516.637 + 429.002 + 436.673 = $1,918 Mil.
Accounts Receivable was $1,700 Mil.
Revenue was 3525.665 + 3434.618 + 3287.965 + 3328.017 = $13,576 Mil.
Gross Profit was 1024.65 + 988.542 + 925.353 + 961.556 = $3,900 Mil.
Total Current Assets was $4,738 Mil.
Total Assets was $18,895 Mil.
Property, Plant and Equipment(Net PPE) was $2,622 Mil.
Depreciation, Depletion and Amortization(DDA) was $628 Mil.
Selling, General & Admin. Expense(SGA) was $1,399 Mil.
Total Current Liabilities was $2,411 Mil.
Long-Term Debt was $9,082 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(1850.425 / 14562.952) / (1699.892 / 13576.265)
=0.12706387 / 0.12521058
=1.0148

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(3900.101 / 13576.265) / (4096.834 / 14562.952)
=0.28727349 / 0.28131892
=1.0212

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (4261.359 + 3044.988) / 18925.653) / (1 - (4737.886 + 2621.918) / 18894.828)
=0.61394479 / 0.61048579
=1.0057

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=14562.952 / 13576.265
=1.0727

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(628.294 / (628.294 + 2621.918)) / (694.805 / (694.805 + 3044.988))
=0.19330862 / 0.18578702
=1.0405

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(1589.096 / 14562.952) / (1399.24 / 13576.265)
=0.10911909 / 0.10306517
=1.0587

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((8972.002 + 2639.469) / 18925.653) / ((9082.096 + 2410.554) / 18894.828)
=0.6135308 / 0.60824317
=1.0087

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(716.148 - 12.698 - 1917.935) / 18925.653
=-0.0642

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

DaVita Inc has a M-score of -2.70 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

DaVita Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 0.66560.92271.07790.95280.89871.05211.01430.72710.94461.0491
GMI 1.03370.96031.03451.00940.99520.92821.03491.05091.05511.0006
AQI 0.98160.95770.97230.97360.96961.09361.2080.95090.96630.9378
SGI 1.64121.07861.07521.07931.05541.0831.17241.4371.08761.0771
DEPI 0.81270.99160.9960.99891.02921.06071.01340.79851.00631.0372
SGAI 1.05641.00420.75280.9691.03211.10241.20970.8350.98591.0687
LVGI 0.9230.9210.96320.92171.04230.98551.03080.96020.94121.055
TATA 0.00520.012-0.0346-0.0328-0.0447-0.0793-0.0348-0.0669-0.0357-0.0674
M-score -2.19-2.44-2.44-2.58-2.76-2.74-2.42-2.63-2.58-2.73

DaVita Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 0.88170.92890.94460.99930.99251.06831.04911.02611.04231.0148
GMI 1.0461.04951.05711.03691.03441.01391.00061.00111.00341.0212
AQI 0.92940.94320.96630.95540.95660.95560.93780.97810.98061.0057
SGI 1.21671.1261.08761.08881.08341.08351.07711.07931.07941.0727
DEPI 0.93230.99811.00631.01391.01581.01531.03721.05851.04511.0405
SGAI 0.95370.95060.98011.03021.04681.05481.06871.05121.03961.0587
LVGI 0.96630.95970.94120.98480.98371.00291.0551.02471.02851.0087
TATA -0.0558-0.0588-0.0357-0.0503-0.038-0.0277-0.0674-0.0574-0.0917-0.0642
M-score -2.65-2.68-2.58-2.63-2.59-2.49-2.73-2.67-2.82-2.70
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